A price-setting firm prefers to operate in the inelastic portion of its demand curve because total revenue increases when price is increased
Indicate whether the statement is true or false
FALSE
You might also like to view...
"All available information" in the definition of rational expectations means that
a. agents use all possible information that could be out there. b. agents use all possible public information that could be out there. c. agents use all information that is relevant. d. agents use all information that is available in which the marginal benefits of the information are greater than the marginal costs of gathering the information.
After participating members of a cartel form an agreement on common prices and output quotas, then an individual firm can increase its own profits by
A) increasing production. B) increasing prices. C) leaving the cartel. D) incurring higher input costs.
A monopoly is a sole ___________, and a monopsonist is a sole ___________
a. buyer in a goods market; seller in a goods market b. seller in a goods market; seller in a labor market c. buyer in a goods market; seller in a labor market d. seller in a goods market; buyer in a labor market e. seller in a labor market; buyer in a goods market
If a firm shuts down, its
a. fixed costs remain unchanged. b. revenue will fall to zero. c. short-run variable costs will fall to zero. d. All of the above are correct.